March 26 (Bloomberg) -- Steinway Musical Instruments Inc., the maker of its namesake pianos, is selling its building near Manhattan’s Carnegie Hall to investors led by JDS Development Group, builder of Chelsea’s Walker Tower condominium.
The company agreed to sell its stake in Steinway Hall for $46 million, plus an undisclosed amount to be held in escrow, it said in a statement today. The property, at 109 W. 57th St., has been home to the company’s flagship retail store since the 1950s, said Julie Theriault, a spokeswoman for the Waltham, Massachusetts-based piano maker.
Steinway bought the 16-story Beaux Arts building in 1999, and hasn’t invested any “significant” capital there, she said.
“Investors understand we’re about pianos, not about managing commercial real estate,” Theriault said in an interview. “For us to own an office building doesn’t make a lot of sense for the long-term future of Steinway.”
The buyer is a consortium that includes JDS, Atlantic Development Group and Property Markets Group, the co-developer of Walker Tower, said Michael Stern, the principal of New York-based JDS. He declined to comment on details of the purchase. Walker Tower, former Verizon Communications Inc. offices, is a 24-story building where the top-floor penthouse is listed for $55 million.
Steinway Hall sits at the center of a condo construction boom in midtown Manhattan. It’s on the same block as Extell Development Co.’s One57, a 90-story tower that has set sales records with two deals valued at more than $90 million each.
Three blocks away at 432 Park Ave., developer Harry Macklowe and CIM Group are building Manhattan’s tallest residential skyscraper on the site of the former Drake Hotel. More than a third of the units at the planned 1,397-foot (426-meter) tower, slated for completion in 2015, have sold.
The JDS group is also acquiring the land beneath the Steinway building from a separate, unnamed owner, the company said. The transactions are expected to be completed in May, after which Steinway will stop making monthly lease payments on the land.
Under the deal, Steinway may occupy the building rent-free for 14 months after closing, and for an additional four months for an agreed-upon fee, the company said. In that time, Steinway will search for new showroom space in Manhattan, Theriault said.
“It gives us the opportunity to design a showroom,” she said. “We can really create the Steinway Hall of the 21st century.”
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